County completes CDBG loan liquidation

Economic Development, Tourism and Planning Director Warren Hart addresses concerns from legislators about the liquidation of loans from the state Community Development Block Grant program. The county and all other municipalities in the state are required by the state to convert the loans into grants by March 31.

Sarah Trafton Columbia-Greene Media

January 25, 2019 10:14 pm

CATSKILL — They’re supposed to help small local businesses grow, but the Greene County Legislature is in the process of liquidating more than $500,000 in Community Development Block Grant loans at a considerable loss.

The amount forgiven by the county on the 14 loans is close to $200,000.

Some county lawmakers are fuming over what they say is a waste of taxpayer money and blame the problem on a state mandate.

The Economic Development and Tourism Committee approved the liquidation of the latest and final Community Development Block Grant loan on Monday. The resolution, which authorized the county to buy back the $10,000 loan at $5,605 from Atina Foods in Catskill, passed the committee in a 7-2 vote.

The state is requiring all municipalities that use Community Development Block Grant funds to convert the loans into cash and use the money for eligible projects by March 31. To receive future funding, the county must form a nonprofit local development corporation to apply for the grants. A resolution to do that passed the full Legislature in November in a 9-5 vote.

Legislator Michael Bulich, R-Catskill, opposed the resolution. Legislator James Thorington, R-Windham, was absent, which is counted as a no vote.

“This is nonsense,” Bulich said. “Be careful what you wish for when the government is where businesses go to for money. It’s such sheer stupidity at the state.”

A workshop for the Economic Development and Tourism committee will be scheduled to address these concerns, Tourism and Economic Development and Planning Director Warren Hart said.

The legislature previously liquidated 14 other loans from 12 businesses in November in a 9-5 vote. All the loans were liquidated at a considerable loss to the county.

Former Legislator Lee Palmateer, D-Athens, is a vocal opponent of the liquidations.

“Mr. Hart promised oversight,” Palmateer said in November. “This is our first chance to show oversight and we turned a blind eye. We’re authorizing a loan at $52,000 for a $144,000 loan. We’re giving away $92,000 of taxpayers’ money to one borrower.” Palmateer was referring to New York Spring Water’s $146,195 loan, which was forgiven after $52,312 in repayments had been made.

The other liquidations granted include a $31,866 loan to Just Pull Inn at $17,051, a $33,573 loan to C&C Excavating at $17,458, a $15,666 loan to New York Restaurant at $11,938, a $5,000 loan to Pippy’s Food Truck at $3,565, a $6,250 loan to Verdigris Tea at $4,133, a $7,143 loan to Marylyn Sewing at $4,482, a $26,429 loan to The Reed Street Bottle Shop at $17,112, a $20,600 loan to HiLo Cafe at $12,160, a $9,552 loan to Jagerberg LLC at $5,261, two loans for $18,803 and $9,763 to Cat Trax at $10,458 and $5,325, respectively, and two loans for $34,603 and $9,552 to Nordic House Owner LLC at $20,023 and $5,261, respectively.

The amount forgiven by the county on the 14 loans totals to $182,042.

Two new grants

The committee also passed two new grants using the liquidated CDBG funds. The grants were awarded to The Tasting Lab and The Woodhouse Lodge, both located in Greenville. The Tasting Lab receives $80,000 and The Woodhouse Lodge $40,000.

“These are grants from the liquidation of projects,” Hart said. “Any uncommitted project income would be remitted to the state. These projects have been pre-approved by the state.”

Bulich asked about the applicants for the grants.

“Are these locals or transplants?” Bulich said.

“These are good economic development projects,” Hart said. “The owners of The Tasting Lab are locals. The people that bought the Woodhouse Lodge moved here and are making investments in the county. I consider that a good thing.”

Bulich inquired about any requirements the businesses have to fulfill.

“The main thing is a job-creation program,” Hart said, adding if that condition is not satisfied, the businesses could risk losing their funding.

Comments

Oh the outrage! Where was the oversight?? - So says Lee Palateer, who could not wait to jump in with both feet without even running a feasibility study into shared jail alternatives at half the cost for a $90,000,000 minimum 30 tax obligation posed by a $51,000,000 jail bond.

“Mr. Hart promised oversight,” Palmateer said in November. “This is our first chance to show oversight and we turned a blind eye. We’re authorizing a loan at $52,000 for a $144,000 loan. We’re giving away $92,000 of taxpayers’ money to one borrower.” Palmateer was referring to New York Spring Water’s $146,195 loan, which was forgiven after $52,312 in repayments had been made."

More or less the same cast of GCL legislators who voted to saddle us with $90M of obligation when they passed the Jail resolution rather than explore sharing out on formal structured basis reviewed and approved by the State, voted to forgive this package of loans gone bad.

Guess what? Most businesses fail. Even with oversight, most small businesses fail to survive their first five years. So why are the legislators shocked and angry?

What due diligence and oversight or research have our good legislators called for so far to ensure that going for $90,000,000 in first obligation final cost bonds won't bankrupt our county? None. They wouldn't even approve a grant whose final cost would be $5,000 to the taxpayer looking at a shared jail facility alternative this past year. Spend $90,000,000 and refuse to spend $5,000 looking at an alternative that could save them $45,000,000 or more over thirty years? That's extremely reckless at best.

Other than being forced along on the Green County Jail disaster Mr. Hart is persistently good. We are NOT attracting new money businesses or tech. We are NOT increasing the income from sales tax and property values are NOT going up. Mr. Groden needs to be replaced. Sheriff Greg Seeley and most accutely Jail Superintendent Michael Spitz need to be replaced yesterday. Spitz is managing a jail he purpously ran into the ground. The vast majority of COC’s Worst Offender report is about him.

The distraction from actual commerce to a jail is obscene and incompetent.

Mr. Hart, except for the jail insanity, tries. But, we are NOT succeeding. The Village of Hunter’s the 5th poorest village in the state, Cairo 3rd, Catskill 41st. We’re missing the root cause, which is the fact that 38% of the jobs here are public sector jobs. That’s not sustainable. When this happens the county eats at itself, the courts corrupt to protect a few, and it mires in error.